May 25, 2026 | 07:18 pm
TEMPO.CO, Jakarta - Senior Deputy Governor of Bank Indonesia (BI) Destry Damayanti said the central bank’s decision to raise the benchmark interest rate, or BI-Rate, to 5.25 percent is aimed at restoring the attractiveness of rupiah-based assets for investors, thereby encouraging capital inflows back into domestic financial markets.“The BI-Rate increase is necessary because we are facing a world where everything is higher for longer. That is the current situation,” Destry said at the National Conference on Regional Economic Development in Balai Kartini, Jakarta, on Monday, May 25, 2026.She noted that US government bond yields continue to rise, alongside higher inflation in the United States and a strengthening US dollar.Bank Indonesia has implemented seven measures to support the rupiah, ranging from intervention in money markets to tightening controls on dollar purchases without underlying transactions. However, Destry said these steps have not been sufficient, prompting the Board of Governors to raise the policy rate.Still, she stressed that the BI-Rate hike does not indicate a withdrawal of support for economic growth, as the central bank continues to ensure adequate market liquidity.
